That said, there is some logic to the DOLP method and its focus on building momentum by leading you to successfully pay off smaller debts along the way to paying off larger ones. What do you think about the DOLP method? What other ideas have been helpful to you in reducing your debt? Let us know.
In the realm of financial advice, there are as many strategies to help you get out of debt as there are ways you might have gotten into debt in the first place. The suggestions from debt-reduction experts and companies, financial writers, and even just ordinary people with Internet connections and a desire to tell their stories, are numerous and widely varied. And the reliability of each source may range from “well-known expert with a proven track record” to “basement blogger with a bridge to sell you in Brooklyn.”
One strategy recently featured on AOL’s consumer finance site, WalletPop, is the DOLP method, which stands for “done on last payment.” Using this method to get out of debt, you would categorize your debt based on how quickly you can pay each debt off making the minimum monthly payment, and then pay extra each month on the one you can pay off most quickly, then the next-easiest one to pay off, and so on until you have paid all your debt off.
The idea of the DOLP method is to build momentum by prioritizing your debt and motivating you to succeed in paying off the debts you can most easily afford to pay off, leading up to final payment of all your debt.
While this is one strategy, another strategy often recommended — such as in this Bankrate.com article — is to pay off your highest-interest debt (which may not be the one you can pay off in the fewest payments) first, reducing the amount of interest and thus the total amount you pay overall on all of your debt.
Keep in the mind that it’s important to discuss your personal financial situation with your financial advisor before strictly following any one plan, and that advice coming from any one source is often just that source’s own opinion, or may be designed to increase sales for a certain company or product. The DOLP method is no exception — it comes from one person, David Bach, and his company, FinishRich Media, which provides financial educational content and products. You should carefully research the background of any company or expert, and consult your financial advisor, before trusting any debt-reduction strategies you may find.